Bitcoin Forum

http://www.forbes.com/sites/jonmatonis/2013/06/23/bitcoin-foundation-receives-cease-and-desist-order-from-california/

I think the State of California does not quite understand the function of the Bitcoin Foundation.

California’s Department of Financial Institutions decided to issue a cease and desist warning to conference organizer Bitcoin Foundation for allegedly engaging in the business of money transmission without a license or proper authorization

California is officially evil (if there was any doubt).

California’s Department of Financial Institutions is the protector of inefficient banking monopolies.

No wonder California is going bankrupt.

..and so the freedom of speech and liberty in America continues.  If the current NSA scandal is not enough.  
I wonder what effect this will have on the BTC price.  So far it has been remarkably stable.

It has to be a blanket action or else someone is smoking crack.

Whats the big effing deal? The notice says "MAY be involved..." Bitcoin foundation is clearly not a money transmitter. The notice requests a response, which I am sure the Bitcoin foundation will no doubt easily provide. Case closed. Nothing to see here.

It is very easy for a "whistle blower", anti-bitcoin organization, or even a competing company (Citibank EasyPay service, or PayPal anyone?) to complain to the appropriate State board, upon which they will send out a generic letter as an "exploratory bite."

NO! NO! what the hell is wrong with the Republic of California? >:(

What if a small business without access to counsel receives such a notice? This is government bullying and is a big deal.

Those starting small businesses, especially in the United States, should assume that even if they do everything possible to obey the law they might get shut down anyway.

The obvious response is to organize your venture in such a way that you can operate regardless of the legality of what you're doing.

SR model is the way to go I suppose

I'm also talking about merchants accepting Bitcoins for payment of goods and services. If the BTC Foundation is a money transmitter, then evidently anyone can be.

The Bitcoin Foundation needs to move elsewhere.

☐ California
☑ Texas

What does this mean? They want to make it so we can't transmit our coins? who do they think we are? Their nigger slaves?  ???

The only reason I haven't moved out of the shit hole California is I still have a job here. Poverty except for the bribing monopolies.

But the Bitcoin Foundation might indeed get in trouble now. ("You can't stop Bitcoin from operating? Well that's not our problem! Powerlessness is no excuse!")

They should've known before. Or they had balls. Additionally to the facing of all the adverseness from here.  ;)

They probably thought the deep discount because McEnery Convention Center is under construction was good deal. Well that backfired! lol

This might actually be a good thing. TBF has been blustering for a while now about wanting to lobby Washington. Well here's their chance for a test case. All they need to do is prove to California govt that the membership of TBF does not run any money transmission business and they win. This could be the landmark case providing ammo to fight Washington. Or it could be that they are in way over their heads and didn't realize that Team San Jose is a government centric organization. lol

Never underestimate the power of dumb officials.

If I were associated with the Bitcoin Foundation, I would've moved to a friendlier place. Once some of the prominent members of the Bitcion Foundation stared into a prison wall confined in a cell, it doesn't help if they're 50 times smarter and that they're right. The dumfucks will make the inconvenience of such a nature that it could be life altering, and not for the better - for those involved.

If some power figure doesn't like the Bitcoin Foundation, there's nothing they can do.

Stay anonymous, and stay under the radar is my suggestion.

Looking forward to future developments regardless of outcome...

No, don't stay under the radar. Rent a government convention center and rub their noses in it. lol

This happens all the time - and many business owners give up without a fight, when they see the resistance they're facing.

Is the Bitcoin Foundation located in California?

The cease and desist letter was sent to an address in Seattle, Wa.

http://www.forbes.com/sites/jonmatonis/2013/06/23/bitcoin-foundation-receives-cease-and-desist-order-from-california/

Doesn't have to be in CA because they ran a business event there. Califuckme is one of the few states that will chase you to a foreign country for taxes. They act like a little country.

I'm guessing PayPal is behind this.
Maybe even Google with their Ripple crap.

tl;dr California thinks the Bitcoin Foundation controls bitcoin.

Clearly incorrect.

Of course, but they don't know that. This really isn't a bad thing. It's a test case. Good, get it over with.

Good thing Gavin moved to Australia, right?

jgarzik, you're a smart and intelligent man. There's lot of officials that will fuck with you and others in the foundation as they see fit. They don't care whether they're in the right or not.

Watch this one closely, people. Unlike other recent FinCEN guidance and regulatory comments, and law enforcement actions, this action from California does not fit the facts nor existing US law.

This simply shows a misunderstanding of what bitcoin is.

tl;dr: California thinks Bitcoin Foundation "runs bitcoin."

LOL, that's SO retarded is almost unbelievable.

First thing I thought they heard about the Bitcoin Foundation having an Avalon Batch #1 and thus they are considered a MSB as per the latest FinCEN guidelines, in any case the true reasons must be the most retarded one... And now I see that it has to be that Califormia thinks BF "runs Bitcoin", nothing more retarded than that.

America, you never stop surprising me ;D

California DFI is notorious for its dysfunction and incompetence. Read this for a taste:

http://www.xconomy.com/san-francisco/2012/02/02/facecash-founder-claims-new-financial-regulation-is-unconstitutional/

As the Foundation is clearly not a money transmitter, this will go away but it will stand as a monument to the lazyness of the bureaucrats involved. It would have taken, what, one afternoons research to find out that this complaint is meritless? But they didn't bother.

The fact they couldn't even write Bitcoin properly tells us all we need to know about their level of understanding. F**king amateurs!

Maybe they think the Bitcoin Foundation was involved in "money transmission" because of the working Bitcoin ATM at the conference ???

But, technically that wasn't the Bitcoin Foundation.. it was whoever owns the ATM..

Everyone here knows how bad this state is. Didn't anyone think of that prior to holding the conference here? Out of 50 other places to go they keep coming back to California. Is it because Roger Ver has an outlet here? Any startup business working with money should know to stay out of the land of fruits and nuts. Read the daily paper.

Guys,

I don't think it matters what we think.

Shots have been fired.  Battle line are being drawn.

Ask the parents of dead Iraqi children if they thought the war on terror fought in there country was legal and/or valid.

The FED and now California are declaring war.  Most other states will fall in line.

Individual prosecution is next.

At last one with clear view!
Someone said once in the Law subforum (can't remember who or find the post) that in Bitcoin business there are only 3 models:
1) Silk Road like
2) Regulated (and always be 'alert' when your masters change the rules of the game again)
3) Go offshore as stealth as possible

We all can see where it will end...

Let's try to be mature adults and keep some perspective.

Recent FinCEN guidances, DHS/etc. seizures, IRS/GAO discussions have all been in line with existing US law.  See my State of the Coin 2011 presentation and earlier forum discussions.  It has always been known that US individuals and companies must... do the obvious and follow US law.  For US bitcoin exchanges, for example, that likely means federal + 48 state licensing.  Enforcement actions like Liberty Reserve or Mutum Sigilium seemed to be clearly outside existing, known regulations.  You gotta expect law enforcement to... enforce the laws.

This California letter is so zany because it does not fit existing law or facts In My Opinion As A Non-Lawyer.

Each regulatory action needs careful consideration within the context of its country.  "ZOMG GOVERNMENT DEAD IRAQI CHILDREN" is about as far from thoughtful consideration as one can get.

Bitcoin is big, and we are getting a lot of regulator scrutiny right now, worldwide.

jgarzik

I am a mature adult and this is my perspective.

Thank you very much.

With all the respect to your technical skills I really doubt your political ones.
This from a non US European Balkan guy with centuries of Byzantine politics f@ckin up the continent.
You people there are so naive...sorry for my tone, I really like most of you but it has begun and you still negotiate!

Fun, we shall have some.

Haha, that was funny =)

However BF is useless vip club imho. Feds may shutdown them. I see no impact on bitcoin network at all.

BF is Goethe's Faust...
Oh Europe! What a dirty old bitch...

They do pay the Bitcoin lead developer's salary.

Obviously it is just an excuse, the true driven power behind these movements is worth noting. I just could not find any reason that anyone on the earth need to hate bitcoin, especially banks and governments, they need bitcoin to rescue them from the inevitable collapsing of bond bubble and sovereign default  ::)

Is that all?

So ?

That's all well and good except we all know they don't enforce the laws uniformly.

They are more than happy to turn a blind eye while Wachovia and HSBC launder money for some of the most violent drug cartels in the world, the very same ones that turned Mexico into a war zone, in exchange for a trivial cut of the profits.

Anyone who isn't a next door neighbour, college buddy, or former employer/employee of their bosses gets the fine toothed comb treatment and had damn well better cross every t and dot every i or else.

Their words tell us they are public servants impartially enforcing the law for the public interest, their actions say they are gangsters operating a protection racket on behalf of their Manhattan associates.

What really useful do they do from this list?
https://bitcoinfoundation.org/about/

Blitz means they want to cut the head to finish BTC quick. Dream on!
http://en.wikipedia.org/wiki/Lernaean_Hydra

Exactly!

I'll sign up to help pay Gavin's salary directly if he ever asks for it. All he needs to do is set up a ReDonate account or equivalent.

They pay Gavin in BTC.

I don't think there would be any jurisdiction until he converts to USD - and at that point, it should be unrelated to the Foundation.

For anyone who wants to read the document:

http://www.scribd.com/doc/149335233/CA-State-Cease-and-Desist-May-30 (http://www.scribd.com/doc/149335233/CA-State-Cease-and-Desist-May-30)

Uh oh, look at page 6. They're fucked.

ReDonate is a better effort than most.  Typically, donations are so unpredictable that no sane developer would rely on them for income, especially if they are supporting a family.  ReDonate solves some of those problems, but not necessarily all.  Getting recurring donations working at all was a big step.  However more ideal -- and what Bitcoin Foundation can provide -- is

• stable salary with benefits
• handles the burst-y ebb and flow of donations
• mostly* frees the engineer from drudgery of constantly campaigning for funds

Donations and bounties are rarely effective in getting and giving long term commitments to open source engineers.

A HackerNews comment making the rounds:
https://news.ycombinator.com/item?id=5928480


BIG FAT WARNING/DISCLAIMER:  This is Aaron Greenspan, who has his own "interesting" legal history etc.

Nice of them to include Google advertisements in their legal document.

Ahahah probably they think that bitcoin is made and controlled by "bitcoin foundation" like normal software

Ahahah they are funny  :D

TBF didn't pay for any advertising for the conference did it?

Bingo.

The point is, The Bitcoin Foundation is a conglomerate of mtgox, bitpay and possible others subject to money transmitter regulations.

Not as much as you think.  Google around for Aaron Greenspan (ThinkComp), the author.

(and PS, this duplicates an earlier post in this thread ;p)

Lol oops, totally missed that other post.
I always thought Chuck Schumer would be the guy to lead the destruction of bitcoin via government fascism. What's up with California they are either broke and desperate for even the tiny bit of change leaking out of the economy via bitcoin or they are run by Paypal lobbyists.

ಠ_ಠ

Do we have any actual lawyer amidst us who can shed some light?

Marco Santori posts here regularly:

https://bitcointalk.org/index.php?topic=206305.msg2158027#msg2158027

If he is online maybe he can offer an opinion (if he has not already been retained).

That's where this needs to be. Why doesn't some mod move it to the legal sub?

Bitcoin exposes how important control of the monetary system is.
I would suggest that whoever is actively involved in the Bitcoin Foundation move out of the US.

Naiveté doesn't even begin to account for the level of delusion in some sectors of this community.

Most of you will never realize, until it is too late, that "law enforcement" almost universally have below-average IQ, zero compunction, and usually some type of un-diagnosed mental illness.  And it doesn't matter whether you're talking about the ones that sit in cars all day eating donuts, or the ones that sit in offices with air conditioning.

Two weeks ago, I had a Federal agent lie straight to my face, then turn around five minutes later and do the exact same thing he claimed he would not do.  When I pointed this out to him, he actually looked surprised, like physically shocked, as though some other personality had been the one to do it.

These people peddle bullshit as a profession.  Their only measure of success is whether you cooperate with them.  Every step you take towards that end is just moving you closer to their end goal of complete control.

You gave them a "foundation" to target and attempt to gain control over.  Don't act surprised now that they actually do so.

+1 Agree!

Hellraiser - aka The Consequences of Raising Hell

Sounds like an opportunity for someone to code a better solution.

In the meantime, one developer (https://bitcointalk.org/index.php?topic=93606.msg2325555#msg2325555) is able to use the existing tools to successfully predict (a portion of) future donation income.

To make the model more successful, he could set a pledge goal and have a web site that automatically displays how close he is to reaching that goal. That shouldn't be difficult to solve via coding.

Is Peter Vessenes still the head of TBF?

They shouldn't have set up the foundation in the first place - it just put a big target on their back. All these orgs are weak points.

OK i accept the need for some gateways - but they all need to be located outside the United States.

To deal with this all they need to do is formally dissolve the foundation and then they arn't breaking any law California has invented. After all Bitcoin doesn't need the foundation - it survived 5 years without it.

Hi everyone. I have not been retained for this matter.  I believe the Foundation has its own competent legal counsel, so I'm happy to weigh in on this independently.  

One of three things just happened:

1) California's DFI just derped. Hard.  Someone over there (whether it's Crayton, Venchiarutti, both or someone senior to them) believes that the Foundation actively issues, exchanges or transmits BTC or fiat.  They might have even confused the Bitcoin Foundation with the Bitcoin Project.  ...Let's get serious for a minute: These men are so ignorant as to believe this.  To the contrary, they strike me as fairly intelligent people who would have done their diligence before sending a C&D. I think (1) is out.

2) DFI did not derp at all.  DFI believes that the Foundation's passive role in the industry means it "conducts, controls, manages, supervises, directs, or owns" a money transmission business.  The Foundation is about to face a very real legal battle with DFI fighting this theory.  I don't believe this is the case either.  To use a popular example: the RIAA does not conduct, control, manage or supervise any recording business.  It's the other way around. EMI, Sony, UMG and its other constituent businesses control the RIAA.  I don't think DFI has any evidence to the contrary. I think (2) is out as well.

3) DFI is being political.  It doesn't know for sure what the Foundation does, doesn't know for sure whether it has its hands in any money transmission business, doesn't know the extent of its relationship with the Bitcoin Project and doesn't know the extent of its relationship with its constituent businesses.  I would wager that only Foundation insiders (that's a very short list) know this.  DFI isn't going to sit on the sidelines while this information stays in the Foundation's black box.  Instead, it has begun a dialogue with the Foundation via a very special political method: a nasty letter.  The Foundation is now compelled to respond and show their cards to a certain degree.  Not legally compelled, of course, but practically compelled to explain their role in detail, and perhaps even provide evidence for their characterizations.  By opening this dialogue, DFI will not be caught with its pants down when "this whole Bitcoin thing" gets big.  To be sure, it is discharging its regulatory and investigative duties.  Practically, though, it's doing a little CYA to put itself in a good position to say "We got out in front of this early." You've all probably gathered that this (3) is precisely what I think is going on.  (1) and (2) above don't strike me as likely at all.

Some of you seem to believe that a battle line has been drawn, that the regulators are now on the offensive against BTC, and will conduct your businesses accordingly.  I would caution against that approach.  I don't think yours is a "conspiracy theory", but like conspiracy theories, this approach presumes that there is some powerful group, or at least a loose association of people at the helm of the regulation, who are steering the course of BTC in a way that favors their stakeholders - banks, paypal, Western Union, etc.  I think that the truth is actually more terrifying: the regulation is rudderless.  There is nobody and no particular group of people at the helm.  There are only competing interests, like banks, bitcoiners, money transmitters and legislators who are all pulling at their own oars, trying to propel the ship in their own preferred direction.  There is no course plotted.  The ship will move forward, that's for sure.  But the strongest, loudest and most dominant rowers will determine its path.

It will be interesting to see if this is part of a larger, blanket effort.  The coming days will tell.

Reading the letter, it seems they are in direct violation of CA Code 2030. Could you shed some light on this?

This... It's perversely comforting to imagine there's a cabal of power players running the world from the shadows with uncanny ingenuity. In that scenario, you may not agree with the direction, but at least someone competent is at the helm. The scarier, more realistic option is what MSantori proposes, that no-one qualified is running the show.

Centralized money-printing sets the course of the economy, and of the government that depends upon it.  The direction is towards centralization and control.  It isn't a "conspiracy theory".  Ben Bernanke gives regular press conferences.  It's the entire reason Bitcoin even exists.

The letter is dated 30th May ... why so much fuss today ?
Surely discussions have been going on for more than 3 weeks already

There must be hundres of these departments.

Two decades ago I attended a professional conference in San Francisco, and afterward I took my daughter to see the museum in the old mint building.  At that time, i was interested in the definition of a hard currency and noted in particular that there were some currencies from Utah on display that were backed by salted pork, and other various currencies, issued by independent banks or businesses.

One of many differing stories (http://www2.h-net.msu.edu/~south/archives/threads/dixie.html) tells of a time when the Bank of Hibernia in New Orleans issued a bank note printed in French and English: different people would identify one side or the other as the front.  The French side said "dix" and the economic zone defined wherever this note was freely accepted in trade was Dixie.

It is almost certainly an interesting piece of trivia to anyone interested in Bitcoin to know about the transition from independent banks issuing bank notes to the current centralized situation.

I think that a well researched and widely comprehended understanding of this situation would add valuable perspective to Bitcoin discussions.

a money transmission business has to involve FIAT. thats the biggest thing to ever think about when bitcoin users are concerned. if you dont touch fiat your not a money transmitter. end off..

although TBF does not as part of their business trade bitcoins for FIAT for any customer. they do/must at some point convert bitcoin to FIAT to pay for things like convention halls...

it is also known that any amount of FIAT wire transferred over $1000 in one go or $15000 slowly over a year would be classed as a business transaction, as oppose to personal transactions (wages).

so TBF needs to clarify when it converted the bitcoin to FIAT to pay for the convention hall.. what was the purpose of the transaction. and the answer would be a purchase of a good or service and not a transmission of funds.

to clarify this they would need to show all the hands that touched the FIAT between TBF and the convention centre. hopefully they used bitinstant bank accounts in the process, as one of the BF's founders is a bitinstant founder. which is fully licenced.

if however gavin found some joebloggs in california and handed them many thousands of BTC in exchange for 10's of thousands of dollars to then use for the convention centre. then TBF has more to explain.

Reposting this for emphasis:


Klee is 200% correct. The C&D letter to Tangible Cryptography from the Commonwealth of Virginia and now this letter from the State of California to The Bitcoin Foundation are aggressive actions from entities that won't negotiate.

And yes, Americans are politically naive. Those of my fellow Americans that think they'll be ok if they follow the law appear to be completely ignorant of the larger fact that we now  live in an age of arbitrary authority. It doesn't matter what the law actually is. All that matters is the intention of the person or the agency wielding the law in your direction at that particular moment. The law won't save Bitcoin because the law is trying quash Bitcoin.

If you want to know what their endgame for Bitcoin is, look at the history of the Liberty Dollar:

watchin..

DO NOT compare bitcoin with liberty dollar.
the issue with liberty dollar was the fact that the metal coins were made to replicate a actual FIAT dollar coin. which comes under counterfeiting laws.

bitcoin is not a counterfeit of FIAT. its a totally unrelated and new currency. (well the thailand authorities could take BTC symbol a bit personal. but its still not as bad as the liberty dollar)

He's the Executive Director, Chairman of the Board, and Treasurer.

This +1,000

US Government is acting beyond stupid, as usual. Let's them shut down the Bitcoin Foundation. Then they can declare "war" to a p2p protocol. That's gonna be funny, I'm waiting.

I disagree, it seems government always have an excuse. Why the "laws" didn't apply for hsbc or similar cases?

You are right, comparing bitcoin with libery dollar is nonsense: bitcoin can't be shut down like liberty dollar

Thanks, I never know how frequently these websites are updated. So, he's the one you want to google for info about what's happening.

Ingenuity no, power yes. Power rests on cunning, a low level of intelligence shared by snakes, spiders, wolves, foxes, birds of prey, etc.

It's a well known fact forgotten by most that whoever controls the volume of currency and credit in a country also controls pricing and all commerce in that country. It's also a well known fact that there actually is a small cabal that has a monopoly on the issuing of currency and credit in the US.

They're very cunning and some of them are even smart.

They don't need to shutdown Bitcoin. They can threaten prison for developers and businessmen.

"BITCOIN MOGUL BUSTED IN SUSPECTED TERRORIST DRUG PORN SCAM"

It's within the realm of possibility at this point. With CA in the mix now, they're not messing around.

People who have political power have it because first they are the type of person who desires this power, and second because they are the kind of person willing and able to do what is necessary to achieve and maintain it.

Because the act of achieving power over other people automatically puts the power-seeker in an adversarial relationship with every human being on the planet, it's an unstable condition which requires active effort to maintain.

Natural selection removes from the political sphere those individuals who are not successful at identify and countering threats to their power, so the people who remain are the ones who can do this, consciously or (more likely) unconsciously.

They don't need to collaborate or conspire in order to attack threats to their power - doing so comes naturally to them. They respond in predictable ways to certain stimuli because they all share a common set of motivations centred around their common desire to hold on to their power.

Well, that scenario it's been likely from the very beginning. That's why Satoshi is a pseudonym and he/them used Tor, right?

Sooner or later, Bitcoin may face that kind of hostility. But it was designed to be resilient to that type of attack. The sheeps will say "oh, it's the coin of the pedophiles, stay away from it, just use the USD, the land of the freedom bill that it's used only by honest people and that cannot be used by pedo-bears".

But IMO Bitcoin will survive to that and raise stronger. There are a lot of sheeps, especially in the US, but there is also a lot of people who are not sheep and want to use REAL money like Bitcoin.

In my opinion Bitcoin needs to be stress-tested. This experiment need to resist a ban to be really successful.

Exactly. It's how the pack mentality operates. No one needs to teach pack animals or gang members. They either become the alpha, fall into line or they're out of the pack.

Yes, the tech will survive. It might even become better. I have far more faith in human ingenuity and spirits like those that created Bitcoin and those of us that use it than I do in the unthinking brutality of those that feel a need to "regulate" everyone else.

the US government only has control over US dollars.. end of

they do not have control over the euro:
and everyone knows about the number of red light districts, cafe's selling drugs and also how oil tycoons may be thinking of dealing in euros as oppose to dollars. yet the US government cant do anything about that.

they do not have control over the Yen:
and everyone knows that most of their electrical products come from japan and having the ability to control yen would make supplier costs even cheaper.  yet the US government cant do anything about that.

they do not have control over the thai baht:
and everyone knows that most of the counterfeit goods originating from thailand. and to add to this counterfeit goods in Beijing, cambodia at some point passes through thailand. making thailand a fashion threat. yet the US government cant do anything about that.

i can give many examples of other currencies being related to illegal activities.. mexico=drugs, iraq, wars/weapons etc..

the point is when the currency is involved the government cannot do anything about a currency they do not own.

well they are doing pretty well against iran's currency

You are Free... to do as we tell you.

Overpaid government demons in action. Best thing is, ignore it and move on. Let them issue an arrest warrant for S. Nakamoto  ::)

I believe that's someone who want to buy coins cheap :D

New Hampshire, actually.

Interesting thread (one of several on the topic here), but the comments to the Forbes article itself are also worth a read.

http://www.forbes.com/sites/jonmatonis/2013/06/23/bitcoin-foundation-receives-cease-and-desist-order-from-california/

On balance, there is a lot of support for BTC from the Forbes readership, Matonis' readership at least.

I don't think I've seen anyone comment anywhere to the effect that California has done something good with this move. I wonder how it will play with the public at large.

And of course, as always, who is doing what to whom? No "aha" light goes on for me yet.

Maybe it really is as tawdry as this Forbes commenter speculates:

"Californicatin 1 hour ago

You know, as a former employee of the State of California, I have to say all I see when I look at this is a pleading for money by way of the sentence: “For more details on applying for a money transmission business license in California….”. This most definitely feels like a form letter, as well.

I mean, it was sent almost exactly one month prior to the end of the fiscal year in CA. If I remember correctly – that’s also about the time they send around the memo regarding the final day to intake any monies that will be able to apply to the closing fiscal year.

Or at least – here’s to hoping……"

Anywhere outside the USA would probably be a good start.

I can't help thinking that we're seeing the early stages to the setup of what may go down as one of the most significant cases of Streisand effect ever, with global economic consequences.  If you guys thought the past 4 years were really interesting...

What the heck US govt wants, why they are doing so much fucking drama?

another seizure story, (might be related to this one)
http://letstalkbitcoin.com/post/53700133097/users-bitcoins-seized-by-dea

THIS!

No news is good news, but there's no such thing as bad publicity.
Everything is going according to plan.

I'm talking about US govt's action here ^ not the guy or his money seizure.
They are thinking bitcoin as some fucking fraud money system because peoples are using it for illegal purpose.

California bureaucrats are famous for their misunderstandings. Recordings for your entertainment  ;D

http://marcstevens.net/cos/cos20130221.html
http://marcstevens.net/cos/cos20110914.html
http://marcstevens.net/cos/cos20111201.html
http://marcstevens.net/cos/cos20070101.html
http://marcstevens.net/cos/cos20061116.html

Good thing they're going after Bitcoin. I know for a fact that USD never can be used for anything that is not legal. This is a feature of Fiat money that is undeniable. I think the state of Cali has a great case here. I know for a fact if you try to sell drugs and receive usd bills, then these bills vanish in your pocket - true fact. Cryptobills must be stopped, whatever the cost, and whatever the collateral damage!!!

Yup, in Fiat we TRUST, NOT!!

thats because america invaded iran, replaced its government and took over ownership of irans currency.

as i said before america does not control the euro, yen, pound. the only way it can do is by creating a war and taking control. to then make its demands on the population that use it.

now what country does bitcoin belong to that the US military need to bomb? - none
now what government does bitcoin belong to that the US military need to overtake? - none

let hyperthetically say the US government take over bitcoin foundation and ask gavin andressen to make a V9.1 of bitcoin QT which works in favour of the US government by moving 20% of all transactions to a government address.

we as the community simply go back to version 0.8.2 and allow them to play about on the fork V9 creates while we continue unhindered on the 0.8.2 fork

Even more amusing are the ones that repeatedly come up from allegedly-well-informed fully-qualified commentators and pundits of the forms:

"Some evil geniuses believe the Bitcoin might X, Y and Z." (There can be only one! The Bitcoin!)

"Bitcoin verbed a noun." (as if Bitcoin is an entity capable of action)

"Bitcoin must obtain a license." (as if Bitcoin is an entity capable of possessing standing as party to a legal proceeding)

Quoted for 'franky1' stupidity.

Bollocks, Jeff. Bollocks.

Like a great many statists, your words seem to indicate, once again, a conflation of what is legal with what is just, and I daresay a seeming lack of thoughtfulness toward justice concerns.

Let me Godwin it right down for you: The Nazi regime fully complied with all laws in the operation of its extermination camps.

"Law enforcement" can go eat flaming death, as far as I'm concerned.

Mike,

Just two cents. If I remember it well you called for TBF to dissolve for plans to spend money on lobbyists and not on testing and development.

I partially agreed with you. I too think money you donated can be put to a better use than on lawyers.

It's kind of ironic that the people doing business as 'California’s Department of Financial Institutions'' may prove more successful in dissolving TBF than you :D

Will the news of this cease and desist order have an impact on BTC price when EU/US wakes up?

To be specific, my opposition is based on paying for lobbyists, not lawyers per se. There are plenty of instances around Bitcoin and its promotion and flourishing which, like it or not, require legal work.


I never thought it would be a solo effort ;)

when are they going to send in Arnold the Terminator to stop bitcoin?

Good. TBF isn't a money transmitter, but at least one of their members is (Charlie Shrem - bitinstant). I personally have no problem watching statists be the victims of statism.

If the board of TBF is sent to Guantanamo, it would be good for cryptocurrencies, but alas, its all just theater.

I for one, think this is a good development for bitcoin.

We all know that as bitcoin grows and gets bigger, more accepted and more widespread, that legal dramas are inevitable.

It had to start somewhere ... and this is the beginning of Govt's dipping their fingers in, trying to see what they can do about.

It's kind of explaratory right now ... let them explore.

As long as the Bitcoin Foundation do a good job, i don't see a problem.

And the more news for bitcoin, the better.

Good then :)

Let's hope (I still can't believe what I am writing) this statist action is carried out quickly and brings as a non-intended effect new quality for Bitcoin and Bitcoiners, and a better mechanism than TBF for funding Bitcoin testing and development (including Gavin's salary) is devised.

I thought that the entire purpose of TBF was to paint a big red target on themselves so they could divert the attention of gov towards them and away from more important things.  As someone else said above "everything is going acording to plan".

Bitcoin gets the free publicity, more people look into it, etc.

Great job BF.  Now if we just get a bunch more gov threats we could be in for a nice price bump.

Isn't this exactly the battle we all know is coming?  This is just the beginning.  Huge gov boondogles never go down with out a fight.  Never.

Quite Obviously Cali, executive is wrong

Goto court, defense,

[1] it's not recognized by any govt as FIAT,
[2] not issued by any recognised sovereign govt


eg, does giving monopoly money to each other constitute fiat?

What the gov' types fail to understand is that people are willing to work for something, BTC and value it independent of any central issuing authority.

Thus they face a paradoxical dilema, to recognize BTC would legitimize the people the holders of btc as quasi sovereign, and send the price to the "moon" to use troll box vernacular.

to not makes it very hard to make laws that capture it.

How do you write a law that says,

'you can not use Crypto's as money and we don't legally recognize Crypto's as money'

the logic of this is delicious. BTC/CC is really going obliterate much of illogicality in any law / gov system over time.


also does opencoin/XRP get any of these type of threats....I suspect not as it seems to be in the maw of the right money

Didn't you get the memo?  Federal Reserve is 100 years old now.  US gov orgs gave up control of the dollar long ago. 

This simply shows a misunderstanding of how power works.

tl;dr: Jeff fails to understand that "running bitcoin" is irrelevant to what's about to happen.

I see a positive impact as a result of noobs no longer thinking bitcoins are issued by THE bitcoin foundation.

Nah, they'll just drone 'em.

He's also about to be taking a shower while this large fellow with an attitude you couldn't knock down with a hammer keeps whispering in his ear: Oh nancy, Oh nancy. (http://www.imdb.com/title/tt0181689/quotes)

The timing of Gavins sabbatical to Australia is priceless.
 

Safely away coding without distraction. The rest of the foundation can fight this next level of bureaucratical nonsense and free publicity.

 ;D

I am more and more persuaded in fact that Gavin is part of the problem, and that paying him doesn't help. Gavin's seat ought to be occupied by the Linus of Bitcoin... a Brash Dickhead For Life, if you will.

Is there anything we can do to help? For example, donate to hire law firms?

huh I just found out about this and I really don't think it matters much.  California is broke and is being made to do this nonsense or is looking for attention and handouts from the bankers IMO.

TBF was licking govt. asses for a long time (e.g.: https://bitcointalk.org/index.php?topic=192924.0 (https://bitcointalk.org/index.php?topic=192924.0))
Now the ass licked back. Shit happens.

I doubt this had anything to do with it though, still the irony is striking.

Second this.

Can you imagine Gavin having the balls to say the sort of stuff Linus says (http://arstechnica.com/information-technology/2013/02/linus-torvalds-i-will-not-change-linux-to-deep-throat-microsoft/)^* that needs to be said?  And no, burning a $1 bill doesn't count.

No, he's too busy working in secret, off the bitcoin-dev mailing list on some sideband "payment protocol" to bootstrap the de-anonymization of bitcoin via the X.509 SSL infrastructure.

That and plastering "bitcoin CORE CORE SUPER-CENTRAL INNER-CORE dev" on everything he touches.

I want Satoshi back.

(*) you know you can trust people who've made it through their 20's and still talk like this when it matters

Very good question. Especially in relation to the word "advertise".

This mental image will haunt me almost as much as this one (http://www.jwz.org/blog/2013/04/dont-be-shy/).

He did announce that he will be stepping down but AFAIK he hasn't yet.

But Bugs just wants... A friend.

• This is not secret.
• It will not de-anonymize Bitcoin.
• Can you provide a better way to protect against address replacement attacks?

I recognize there are critics that can be made. I, for one, never really liked the idea of a "Bitcoin Foundation". But what you just wrote is not pertinent.

A lot of you guys on here are pretty naive.

TBF isn't under any sort of attack - they ARE the establishment. This is all just theater to establish some "street cred" for them.

Personally, I would rather try to improve the situation than retreat from it.

How so?

All you did was answer my question with a (rhetorical) question.

My thinking exactly. California is a bureaucratic nightmare but they usually have something they can sink their teeth into before they start sending action letters. I ran a business in California for 20 years. I've received my share of letters from the state and none of them were completely baseless accusations. They do their research first. Funny that he chose not to answer that question. A little close to home maybe?

 or this (https://www.youtube.com/watch?feature=player_embedded&v=URT6hebOSnk)

My guess is that he is just busy.
Anyways that Code 2030 is quite worrying. Generally speaking, I fear anything that forbids advertising something, since it can usually be twisted to condemn a broad range of behaviours and limit free speech.

IANAL, but...


I think it would be amusing if the Bitcoin Foundation sent back a reply, stating simply

Done!

and just continued to do what it's doing. If that's the end of this amusement, some California bureaucrat will smile smugly, feeling a job has been well done. If we are lucky enough for this amusement to continue, then they will (I hope I hope I hope) keep sending more C&D letters, to which TBF can just keep replying, "Done!" until those bureaucrats actually spend some time to try to prove that TBF is actually doing any money transmitting. And fail.

Downside, though, is that they would be too embarrassed about wasting a few hundred thousand tax payer dollars, and will probably try to pin some BS on TBF, just so none of them get in trouble for wasting everyone's time.

It just amazes me how many stupid letters from states every year I have to answer (and some have to fight) just to run a business in the US.   Last year, we spent 80k on legal fees answering stupid inquiries that then send "judgement" letters for taxes owed to you.   Most guilty states:  California, Washington, New Jersey, New York and surprisingly, Texas.

That would be funny until you find out the burden of proof is on you and not them and your facing a nice big fat fine. I guess that's ok though because the community would be paying the fine from member donations.

Exactly, people do not seem to realize it costs governments nothing to sue you.   It actually helps them justify their jobs as being "so busy" and just costs YOU money to defend.

Most people that have dealt with the government do understand that, it's Rassah that seems to not understand. lol

But if you are not actually doing the thing they are accusing you of doing, and you tell them that you have stopped doing it, you aren't lying, right? It wouldn't be saying, "I am not doing this, please prove that I am," it's simply "I stopped doing it."
I guess they can still fine you, claiming that you are still doing the thing you've never done in the first place :(

Have any Cali businesses received this letter? It is thought to have been sent as part of a flotilla of letters, but I have found no others. If it is just the foundation that received this, that is a little weird and provocative.

Here is the letter:
http://www.scribd.com/doc/149335233/CA-State-Cease-and-Desist-May-30


P.S. For those who think we should just disengage from the regulatory process, this is what you can expect more of. Laws written by people who know nothing about bitcoin for people like you who use bitcoin. You can whine about this all you want at the forums, but if instead you wrote your political representatives, you might actually make a difference.  

If you're audited by the IRS, and I hope you never are, the way to solve it is to lawyer up, get your paperwork gathered and go in shooting. That will lessen your costs. Doing nothing but saying, "yep' I did everything right" on a response letter without providing proof is the way to get a full judgement against you for unpaid taxes and possibly jail time. Not a good plan.

I'm sure that applies to taxes, as a he-said-she-said kinda dispute about revenues that needs to be resolved, but this seems pretty cut and dry. They said Bitcoin Foundation does the functions of a money transmitter. Bitcoin Foundation does no such thing. Not even close. There isn't even anything for TBF to show to prove that they are not. Unless these bureaucrats come up with something like "Bitcoin Foundation is hiding the evidence that they are transmitting money!" there is quite literally nothing for TBF to show or prove...
right?

Hey Rassah, I agree that the foundation seems an unlikely target for this action. Perhaps this is a "shot across the bow" of some sorts? 

Really? Does TBF pay the lead developers salary? Does the lead developer work on a software system that can transfer funds for cash out at an exchange? Did TBF spend any funds advertising the recent California conference? Does the state of California consider that to be enough for violation of the law? I don't know enough of the inside story to answer all these questions but if you do please enlighten us.  

Is the foundation going to make any announcement about this matter to its members?

It's all over the news already so it hardly needs announcing, it probably needs an official response not an announcement, and I would assume the response would be after first taking legal advice.

It was discussed on the BF forum (https://bitcoinfoundation.org/forum/).

Yes


No. Just software that can store and transfer bitcoins. Exchanges work on the software that transfers between cash and bitcoins. This would be like telling World of Warcraft to get a MTB license because people on eBay trade their currency for cash.


Yes


I really don't know. I would think that if my organization was being sponsored by Bank of America, and I pointed that fact out at one of my conferences, thus giving them advertising in exchange, that I would not have to register as a bank?


I wish I could. Logically, none of this makes any sense. But then again not only I Am Not A Lawyer, but I Am Not A Crazy Person either. And I am starting to suspect these people might be.

Maybe they are just desperate. Consider this equation. The state government in California is all but bankrupt. They have a sales tax for revenue. They read news stories about people "living a week on Bitcoin" and the meme that "Bitcoin allows people to avoid taxes". The recent conference means that Bitcoin is growing.

So for desperate people 1 + 1 + 1 + 1 = 666

I happen to think that California will see all the advertising and the connection with software development as enablement and accessory to a violation but your right most government actions seem nuts so it's hard to guess. Your BofA argument would work if it weren't for CA Code 2030. Selective enforcement is the problem with all laws. If they like you they don't enforce. If they don't they slam the hammer.

I never joined because I don't run a Bitcoin business and that's what I see TBF mostly supporting. I'm not against them but I see limited usefulness for individuals. You're a TBF member, what was said on the TBF forum? Is it just useless chatter like this thread or was there some hopeful news?

Well I guess this issue goes a little deeper then I originally thought I have to admit.  I heard through the grapevine that Californians would be fined for using bitcoins which is sickening!  I have to look into this more just saying if that is true that is crazy and sad.

Source?

No, formally saying you have stopped doing something has an implied admission that you have been doing it.

What seems expedient now could actually be very problematic later, since with bitcoin it is extremely difficult if not impossible to prove you didn't do something.  To attempt that, you would have to fully document all bitcoin transactions/services/businesses you were ever involved in, yet you could still be accused of not revealing all of your wallets.

_{(The reverse is of course not true: coin users can easily prove they did do something, should they choose to.)}

Interesting question would be:

Was it a misunderstanding on purpose? (of how bitcoin works)

If not, then everything is ok. Misunderstanding will be clearified and BF continues as normal.
If yes, then BF is screwed. They were just looking for a reason to shut this thing down.

I know this wasn't directed at me but I am a member so I thought I'd answer.

Patrick did inform us that the letter was dated May 30th but was only received last week. He also stated that Jon wrote his piece before he could draft an announcement so he just linked to it on the BF forum.

Other than that, the discussion on that forum is basically this thread condensed into one page.

Thanks edd.

The bit I don't understand about "money transmission without a license" is are they talking about the transferring of BTC between one place or another, or are they taking about BF accepting USD converting it to BTC sending the BTC somewhere then the destination converts it back to USD?

 ;D ;D ;D

That was f'in hilarious! Thanks  ;D

Always with those damned carrots!

Someone needs to send a cease and desist order to california ... cease being complete idiots and desist from rampant totalitarianism.

I guess Vessenes gets his wish for endless stream of lawyers on the BF payroll now ... glad I sent my btc donation directly to Gavin because all i can see is all those BF donations ending up in slick lawyer's pockets before the whole sham is folded up and no one is any the wiser about what the fuck just happened and where the btc went ... kind of like pirate@havard-law for the good folks.

"I still will go broke paying all those legal fees"

carrots - rolf

Heh, very well could be.  That event was in San Jose, CA.   The facilities were rented by Bitcoin Foundation.   This activity occurred in plain view (and probably was even promoted by Bitcoin Foundation, as-in  ... need bitcoins, go visit the Bitcoin ATM).

I could see the State using that incident as the justification for an opportunity to send a Cease and Desist.
 

Then may be it is a stupid game with a clever calculation behind.
Pressure on BF -> BF is cooperating with regulators -> developers are cooperating with regulators -> small changes in the client to better track transactions -> changes in the protocol to roll back unwanted transactions

U no move to darknet... sending encrypted information without prior key-sharing with authorities is punished with jail-time.

I think it's time to found the "church of random", where our religious practive involves random automated prayer. We'll install random prayer nodes sending random prayers to random other believers prayer nodes in order to worship the gods of random.

Then they allow taxes to be paid using their-fork-coins. Sheeps go buy those (whoa! government endorsed bitcoin!!) and their fork explodes in value, then we are left as the weird minority holding useless coins.

but how to block bitcoins transmission in CA ? technically impossible since BTC is decentralized ...

Well if nothing else a crystal clear big red flag has been put up ...

!! DO NOT DO BITCOIN BUSINESS IN CALIFORNIA!!

... sucks to be a silicon valley money geek and get neutered by east coast bankster-lawyers every which way   ;D

And to all those idiot Californians clamouring for more regulation .... get lubed up, grabbing your ankles is not going to be enough it seems.

I don't know. I'm new here and all, but this almost sounds like scapegoating to me.

Bitcoin Foundation has a legal group, no? What do they make of this letter?

I for one will be writing letters to my elected representatives explaining why bitcoin is important to me as a Californian.

Begging for your freedom is a waste of time in America. They don't give a shit about you or why you think bitcoin is important. Wake up! You're a slave and don't even know it.

I guess he picked his nick "AliceinWonderland" for a reason

:D

This conspiracy theory is ignorant of (a) how open source works and (b) how the dev team works.

LOL'd so hard

And even funnier is the comment from this guy:

"Ronald Wiplinger
welcher idiot hat das in den untertitlen uebersetzt? which idiot translated the text into the sub titles?"

I can only imagine him thinking WTF is going on LOLZ

Letters are more important than people realize.

First of all, it is not uncommon for an aide to a politician to have very little knowledge on a subject. When they read the letters, it can inspire them. It doesn't always, but it can. These interns are often still at the psychological stage where they believe they are there for the good of the people and they can have an influence on the politician.

Secondly, it is not uncommon for politicians to count letters received to see which issues are important to the people.

Depends on if miners can be convinced to stick with the GovCoin fork, instead of switching to the hard fork. If they don't switch to the GovCoin fork (and miners are global, so what do they care about mining some country's coins?), then either no one will mine this GovCoin's blockchain, or so few will mine it that it will be 51% attacked by rogue miners into oblivion.

You do not seem to understand that costs of "defending" your innocent ass.   States and the federal government have NO lawyer bills to pay and they just keep filing and you HAVE to keep defending or they get a judgment against you.    More americans need to be sued by their government for some BS and hear a lawyer that you have just dumped $450 per hour on for the last year tell you "it is cheaper if you just pay what they are now asking than my fees to defend".

Top 9 reasons why California sucks: http://www.newsrealblog.com/2011/02/14/top-9-reasons-california-sucks/ (http://www.newsrealblog.com/2011/02/14/top-9-reasons-california-sucks/)

^^ Fucking Tea Party dumbasses. You also think Ayn Rand is a philosopher? LOL.

 I have been following NORFED/Liberty Dollar since around 2006, and Liberty Dollars actually lead me to Bitcoin strangely enough. The entire reason NORFED was created was that it serves as a protest and alternative to the federal reserve. Why would a group protesting the federal reserve make currency intended to be copies of federal reserve notes? They wouldn't, and didn't. If you bother to look at the rounds Liberty Dollar issued, you would NEVER confuse them for federal reserve notes or coinage issued by the treasury. They operated in PUBLIC since 1998. Prosecutors hadn't noticed this until just recently? Does the treasury stamp coins with a website? Do they even make coinage that size? There are a lot of requirements of similitude in order for counterfeiting to be considered.  Liberty Dollar did not meet these requirements. They were railroaded.

This is a PERFECT example of how the "rule of law" only works for the status quo and the powers that be. Anyone who tries to change the system within the system better watch out, because they already slipped a noose around your neck, they are just waiting until they find undesirable but legal activity to pull the trap door out from under you and declare you a "criminal". We are all subject to this.

You're naive. Tell you what - do what I did 10 years ago and start getting involved. Go and make your calls, knock on doors, get people to sign petitions, register people to vote, support candidates, yada yada yada...

You need to get jaded in that shit first before you can understand that the America you were taught in school is essentially a pile of bullshit. You have no rights and no parasite in government is going to help you.

As a former Liberty Dollar RCO, I can tell you that TECSHARE is 100% correct. Not only did Bernard and LD not violate any similitude laws, counterfeiting requires the INTENT to defraud the public. Bernard had hired a very well known attorney to make sure he WASN'T violating any similitude laws. So how can anyone say he intended to violate a law when he paid someone a ton of money to make sure he wasn't??

It took a completely bullshit stacked jury to twist around that simple logic. It remains as a great proof that there is absolutely NO justice whatsoever in federal courtrooms.

I'm real curious as to the logic of how a "Liberty Dollar" is legally different from a "Linden Dollar", a Hong Kong Dollar, a Canadian Dollar, or an Australian Dollar.

liberty dollar was a physical coin that was put into circulation as a counterfeit of a US dollar coin. it held the $ symbol etc which is trade marks of government.

linden dollars are ingame credits

hong kong dollar canadian dollar australian dollar are bank notes or coins of the country mentioned in the names. the design of the coins/bank notes are tailored to that country to make it obvious to which country they are owned by. which helps to show which country they are legal tender of. EG you cant pay a court fine in US with hong kong dollars as the hong kong dollars are legal tender of hong kong , not the US.. and vice versa

if owned by a government copying or selling a replica without authorisation is called counterfeiting and illegal. (EG liberty dollar replicating US Dollar)

if only the liberty dollar used an L symbol instead of $, then it would have been more regarded as monopoly money or fresh new currency as oppose to a US dollar coin

I feel like the BTC Foundation could easily defend this in court without a trial lawyer...

The man who defends himself in court has a fool for a lawyer.

Wrong. The $ sign is not a trademark of government..LMAO.....take a few moments to think about that before you make yourself sound galactically stupid again.

That is correct franky1 often gets the details incorrect.

http://www.lewrockwell.com/rounds/rounds34.1.html (copy of jury form lists many of the details of the case).

The coins however did use the words "USA", "In God we Trust", have US state names, and symbology commonly associated with US coins.  Statements of the company about launching all 50 coins to coincide with date of US mint launching US state coins was introduced as evidence.  As was documentation that the organization encouraged passing the coins as US coinage (not overtly lying but allowing the counterparty to make a mistake that the coins were US legal tender), encouraged participating merchants to give unsuspecting customers Liberty Coins as change without informing them it wasn't legal tender (i.e. customer buys $60 worth of goods, pays with $100 FRN and gets back Liberty Reserve coins for some or all of change.  Most people would assume that if they paid in legal tender, the change back was legal tender).

http://www.howtovanish.com/wp-content/uploads/2011/03/Liberty-Dollars-multiple.jpg
http://upload.wikimedia.org/wikipedia/commons/thumb/f/f9/Peace_dollar_obverse.jpg/220px-Peace_dollar_obverse.jpg

Then you have aspects like the $10 Silver coin having about $6 worth of Silver at the time of minting.  Everyone at every level got very large cuts of the profits.  Ultimately it was unsuspecting consumers who got $6 in Silver instead of $10 in FRN.

cryptoanarchist:  How do you resolve what you said in this quote with the pictures in the previous post?

Are you saying the pictures are fake?  From those pictures and D&T's post it is OBVIOUS that there was an intent to defraud.


TECSHARE:  how can you say that with a straight face?  I just looked at the rounds and they look a lot like US money to me.

It's ok to be ignorant but it's not ok to lie.

If you're ignorant, educate yourself. If you're lying, stop it.

D&T, I'm surprised. You're usually more on top of it than this.

It says, "Trust in God" and there's no country name. libertydollar.org is prominent on the coin. Only a fool would be taken in by this coin.


And you'd have to totally out to lunch to ever think that Ron Paul would be put on a US coin:



No one using this coin was an unsuspecting consumer. ;)

Obvious? That is clearly just your opinion, because its not obvious to me. I don't think they look at all like US coinage, as evidenced by the website and 800 number on that. Are you saying that you've seen US coinage with a website URL on them?

If you were going to convict someone based on opinions, then I guess you could go after Chuck E Cheese for their "dollars" as long as someone had the opinion they looked like US coinage. That's why there are similitude laws - to make the laws OBJECTIVE and NOT SUBJECTIVE.

I'll restate what I said before: you can't claim that there was intent to counterfeit when you hired a lawyer to make sure you aren't violating similitude laws. Now, if someone else used them to pay a merchant that is expecting fiat, there may be an argument there, albeit a weak one as most store transactions lack a written contract and the person offering a LD could argue they were proposing new terms.

On a personal note, BurtW, why are you so on the US government's nuts? Are you a cop or something?

That's a completely irrelevant argument. There is no such thing as circulating coinage that has a metal content equal to the face value. If it did, it wouldn't circulate for long as people will take them out of circulation for the melt value.

.25 quarters contain only ~4 cents of metal

.05 nickels contain only ~4 cents of metal

.10 dimes = ~1.5 cents (about a 700% markup!)

Pennies from 1982 and earlier are worth about 2 cents each, and are slowly being taken out of circulation exactly for that reason.

Paul Clayton, senior counsel at the Department of Financial Institutions

Just to put a name and face on the record for the forces at work here. Wonder how much he actually knows about IT? Innovations in value exchange technologies?

Well at one time the dollar had "one dollar" (which is a unit of weight) of gold.  It was either a dollars worth of gold in the coin itself or the paper note could be redeemed for a dollar.  Liberty claimed selling point is that it was backed by silver.  If it merely is a fiat currency sold over face value to the profit of issuers well in many respects it was worse than the federal reserve note.

I think we can just agree to disagree.  I read the states evidence and it is pretty damming.  Ultimately that is why we have juries.  Is it possible they had no intent to counterfeit (which doesn't mean produce an exact replica it means passing currency off as legal tender)?  Certainly however looking at the evidence if I was on the jury I likely would have sided the same way.

This will be my last post to avoid derailing this thread further.  Feel free to have the last word ....

you're still confused. "Dollars" today aren't "dollars" of 100 years ago. A "dollar" used to be defined as 371.25 grains of silver, now it has no meaning whatsoever. Silver dollars didn't even need a "face value" as they were what they were. And LDs were never "fiat", since they were never issued by the government. Please google "fiat - definition" to avoid being ignorant.

Furthermore, my last post was about metal content of coins, and you brought up notes (you should google what a "note " is too) - which are a whole different thing.

LD coins were the subject of the trial, not the warehouse receipts (LD didn't make "notes"). The coins weren't backed by silver - they WERE silver. The warehouse receipts were just what they said they were, and the government didn't even attempt to build a case around them, even though they stole the metals they represented.

I think it's time to found the "Meta-Church of Random Churches", where our religious practice involves prayers which permute and pervert the random number generators which create and perpetuate the infinitude of random churches, whose prayer nodes send random prayers to random other believers' prayer nodes in order to worship the gods of random.

The collected energies and entropies of believers' prayer nodes' prayers can then be combined with the Meta-Church's RNGs and other entropy sources, thus:

Ei = Ei + f(a, BPNP) + g(b, MCMRNG) + h(c, {SHA256(SHA256()) | scrypt()}(CABN))

where:

Ei = the momentary entropy seed function
a, b, c = "nine numbers of the cosmos" constants (cf. Rees, FRS)
BPNP = summation of momentary believers' prayer nodes' prayers' entropies and energies
MCMRNG = summation of momentary Meta-Church Meta-RNG outputs
CABN = summation of momentary output of California State Bureaucracy Nonsense Generation Function

Self-compiling code, as well as a related LISP dialect, will be published shortly on Github.

It's news like these that makes me ponder this about this "world" we live in.

The man who quotes "The man who defends himself in court has a fool for a lawyer" is likely on the Bar Association's payroll.

 ;)

You get two Lolcats for this comment:

http://forum.i3d.net/attachments/offtopic-english/943147141d1221752968-lolcat-conversation-thread-441249.jpg

http://harry.enzoverder.be/cats/lolcat-funny-picture-moderator1.jpg

Use them wisely

So:

E-gold operators arrested and jailed for unlicensed money transactions
E-Bullion operators arrested and jailed for unlicensed money transactions
Liberty Dollar owner jailed for variety of bullshit charges
Liberty Reserve operators arrested for unlicensed money transactions
Russian payment gateway operators kidnapped and extradited for enabling online gambling
TBF members ... ???

It doesn't sound very promising when you put it that way.

In my opinion it is for the good of Bitcoin system:
- the legal fiction called TBF either dissolves
- or developers leave TBF and remain independent.

It is neither safe nor noble for the devs to be associated with this business organization.

The suit and white collar guys from TBF (businessmen) who wanted to play with fire by hiring lobbyists to get intimate with regulators / legislators to promote their present and future businesses at the expense of Bitcoin system development - well, let them get burned (hopefully not severely). Let them and their lobbyists wage silly legal battles.

nope not always

Then their problem was trying to circulate it in this country specifically.

Even thou California objectively derped, the worstcase scenario, besides Gavin &co getting waterboarded forever, isn't so bad.

meh, The US took out Bin Laden, all of his top leaders, and his entire Al Queda organization and now we are hunting multiple groups and calling them all Al Quedas. Haters don't stop hating once they start.

I don't know man. On Sept. 11, 2001 Al Qaeda had sent about 10K through their base camp. (Al Quaeda means military base camp) Today I don't think anyone even knows how many tens of thousands of fighters they have. They control territory in Africa, Yemen, Afghanistan and others. If you include other Jihadi groups then we see that this is a rapidly growing global movement which has expanded massively since 9/11.   

Why would you want TBF v2? There would be no guarantee that history doesn't repeat itself.

A headless solution for Bitcoin needs to be found.

Depends on whether you give into the US propaganda or not, the US claims that every single group that rebels against them belongs to Al Qaeda and that Al Qaeda is a terrorist organization that has many independent cells in many countries which is a quite big claim, it completely ignores the fact that some people (or most) might want to rebel against the violent occupation, since really, there is no such thing as a peaceful occupation.

No need to get all tinfoil-hatted up, the US is strong but not THAT strong.

Why would you want a solution when there is no problem ?

Fair points. "Jihad" is on a spectrum from peaceful resistance to combat. I was only thinking of groups that have publicly sworn an oath of allegiance to Al Quaeda, Al Shabab, for example; Or official franchises, such as Al Quaeda in the Islamic Magreb.    

I agree that if TBF is cut down we should construct another one (or two) for that very purpose.

To quote from the Hitchhiker's Guide to the Galaxy one of my favorite quotes in all of literature:


So to paraphrase:

I'm not quite understanding. Do you consider it "cut down" because of this letter? If so then we are all cut down. If TBF is being called a money transmitter then I think all bitcoin peers will fall into this category. It appears that simply running the client may be interpreted as a crime in CA.

I was responding to this post, which I see now was probably sarcasm.

At any rate my main point still stands.  TFB serves the useful puprose of drawing the attention of regulators away from the real power of Bitcoin, gives the regulators and lawyers something to do and makes them all feel they are doing their job, so I support TBF as a great decoy.

You've just nailed my biggest fear exactly. If, due to lack of understanding, malice or unwillingness to learn, CA legislators found that the client is a basic tool of transmitting electronic funds which have the single purpose of converting to fiat then they could rule that everyone using a client is a money transmitter. Because of the high cost of entry (licensure) Bitcoin would become illegal for all but the wealthy. The EFT subset called ACH itself isn't fiat but it represents fiat as a system of credits and debits transmitted electronically. It only becomes fiat at the end of its journey at the other end of the transaction. What would happen if they look at the system and say, "well you have just invented another version of ACH and you need to be licensed for that. We believe that's stupid because we see the small economy and that we can buy something using only Bitcoin so it's distinct from a fiat transfer system but what will legislators believe. The bad news is that even this community values Bitcoin against the US dollar and is fixated on "what Bitcoin is worth today."

I see a problem.

Politically curious businessmen merged with Bitcoin developers in one head called TBF. Politically curious businessmen at least theoretically can influence the work of the devs.

Bitcoin is of a threat to the people doing business as governments. People doing business as governments have almost all the guns, all the rockets, all the prisons, etc in the world. It will be easy for them to target one head, if / when they ever decide to kill / slow down Bitcoin development.

Bitcoin development should be headless / leaderless, therefore uneasy to kill / slow down.

If someone wants to step up and be the figurehead of Bitcion I say go for it.  In reality Bitcoin is headless.

The fact is this may happen.  I personally don't think it will but it might.  We should prepare for it just in case.

That was a fear of mine as well. I thought FinCen's guidance ruled this out. It looks like it did not convince CA lawmakers. What a legal and economic mess California is. All their rules have made Cali a silly place to live.  

"Al Qaeda" is (was) a CIA database.

California is awful. I know I live here. People outside the US don't realize that each state can act like a separate country in legal matters and only when contested to the top or usurped by federal laws does the federal government matter and even then they can choose not to rule. I remember discussing the formation of the EU back in the 90's with an old friend that I used to visit in Berchtesgaden. He used the US as an example of what can be done with large territories. My response was, why do what we're doing? It's not working for us.

ok, sorry for total OT and tinfoil hat time (but think about it, could make sense):

Al Qaeda fighters (mujahideen) were initially used (by the US) to fend off the Russians in Afghanistan in the 70s.

And they were also used by the US / the west / NATO / whoever in Lybia and now Syria to play the role of "freedom fighter rebels" provoking by violence the local leaders (Gadhafi and now Assad) to react and instill sektarianism and hatred among the population in general. This was done in order to have an excuse to bomb the shit out of the place and remove (i.e. hunt down and kill) the leader in order to be able to take over the resources (who controls Lybias banking sector? Who has Gadhafis gold? Who controls access to the oil and other resources?)

It's always the same and it's been going on and planned for a long time. Read John Perkins. He tells us Saddam Hussein initially worked for the CIA. Listen to General Wesley Clark, who describes something that happened shortly after 911:


Obviously they were also used to do 911.

Just saying: "they" are really "you"

(also interesting in this context: Stephan Molyneux: The true meaning of Startrek into Darkness (http://www.youtube.com/watch?v=fBRf8DVkc-8))

Certainly the CIA did work with people who went on to form Al Quaeda, but the group formed after the Soviets left. (1989-90?) As in any war, you side with anyone willing to fight, or you lose.
I have to disagree with the idea that the CIA works with Al-Quaeda. I have friends and relatives in the intelligence community. They see the base as an ultimate enemy in every way. And anyone within AQ who was caught even trying to talk to a western intel agency would meet a horrible death.
Jihadists are religious nuts first and foremost. They are fighting a super-natural war with the forces of evil. Cooperating with the west is bargaining with the devil and cannot be allowed under any circumstance. 
I have met some of them myself on the battlefield and they are not afraid to die, nor do they make deals. You can convert to Islam, get out of the Muslim lands, or die. That is all AQ offers to westerners.   
   

Gavin is the only developer on the Bitcoin Foundation Board. He's a great guy and I tend to agree with him almost every time he voices his opinion on something, but if he disappeared, Bitcoin development would continue and it would most likely continue in much the same direction it has so far. Someone else would step up to fill the "core developer" role and that person may or may not hold a position on the board.

I do think it's a good idea for at least one seat to be held by a developer so that there is always someone to give an informed opinion on what the protocol is or isn't capable of doing.

I've always believed the Bitcoin Foundation should be the public face of Bitcoin, sometimes acting like BurtW suggests (drawing fire from overzealous lawmakers and regulators) and sometimes taking on the role of a PR department, all the while doing as much as possible to provide the best possible environment for Bitcoin to flourish. It shouldn't be confused as part of Bitcoin, but rather as a guardian of Bitcoin.

Because Bitcoin isn't classified as Legal Tender, the way I treat it is more like goods and services.

In other words you buy Bitcoin from someone and sell Bitcoins to someone else, not necessarily at the same price.

An analogy.
Say I want to pay someone far away $100, but I don't want to post $100 note, as long as the recipient agrees, I can do something like purchase a stick of RAM worth $100 send it to the person I want to pay, and it's up to him to sell the stick of RAM locally, he might get $95 or $105 for it providing he can find a buyer. Now a stick of RAM is not Legal Tender either, I can't pay my taxes with it, if the government were to legislate that it was Legal Tender that would be a different story.

I see Bitcoins as no different except they are virtual goods like a piece of software, or game code, that people by and sell via the Internet all the time.

If we can just get you into political office quickly we're in good shape.

Well Vessenes did stick his head out .... and on the balance of probabilities having the guy in jail and out of harm's way may not be such a bad thing.

No, this does not fly at all.

The status of legal tender here is irrelevant. Legal tender is simply the currency which is designated as lawfully acceptable for all debts, public and private. So the US government must accept US dollars for taxes, court judgments, duties. A lender in the US must accept US dollars if offered by a debtor to repay a debt.

The euro is not legal tender in the US, so is not acceptable for repaying any public debts, and is only acceptable for private debts at the discretion of the lender. The euro is however a cash equivalent, like all foreign currencies. A money transmitter is dealing in cash equivalents, and the FinCen guidance now includes decentralized virtual currencies as a cash equivalent. A cash equivalent is not a good or service.

However, it seems the BF can successfully argue that they are not money transmitting.

It wouldn't be illegal it would be regulated effectively guaranteeing no mainstream adoption. You're right, the only users would be those who disregard the law like BitTorrent users.

Bittorent doesn't transmit money, it transmits files.

If they want to they can rule

* Anyone using bitcoin is a money transmitter

* Anyone who mines a block assists in the transmission of money

Where is their definition of "cash equivalent"? Most cash equivalents I know of are things like stocks and bonds not virtual items.

So by that ludicrous reasoning Is Namecoin cash "equivalent"?

Litecoin?

Devcoin?

PPCoin?

BBQCoin?

"How silly do they want to look?" is really the question here isn't it?

http://www.fincen.gov/news_room/rp/files/sar_tti_09.pdf

Pages 6 and 7 you will see "cash or equivalent" as a separate instrument from stocks, bonds and most anything else of a monetary nature.



They're all called cryptocurrencies for a reason. But because they have miniscule buying power they are well below regulatory radar, at present.
Bitcoin can't be a super-currency or "gold 2.0" for buying stuff, but also monopoly and sea-shell money for regulatory purposes.

Now, I know it can't be regulated in any traditional sense, as it stands, but regulators will always try because they need to justify their salaries, and preserve their bureaucratic empires.

Laws are next to useless if they are inconsistent within themselves.

Can you tell me what definition of "is" is? That's where they're heading with that kind of subjective law interpretation on the hoof.

- It is not a conspiracy theory (which is stating an existing situation) just an extrapolation, a speculation of an actual development for the future what could happen.
It is also not very probable that the government is trying to act on changing the protocol but they are probable trying to track transactions better which could lead to the next point.
- a. Is your Android not an open source where you give permission to track your position, stored data and calls ?
- b. Sorry. It was not intended to put in question the integrity of the development team. They are doing a great work.  :)
But we can't know how will work the (future) development team in the future.

VERY SOLID summary of why liberty dollar was not some libertarian "fighting for the good of the people" and actually was a scam.

I would be very cautious about anything related to bitcoin.

Outcome #1: The order is voided, and life goes on
Outcome #2: The order is enforced

The problem is if: A legal argument is made that bitcoind is the "creator" of bitcions, and bitcoind is owned by the foundation, hence the foundation is the creator of a bitcoins, and all the problems that come with that legal argument

can somebody tell me why a foundation that is meant to represent a worldwide monetary movement is based in the United States, when that country is VERY bitcoin hostile?

and why are so many bitcoin conferences held there?

I don't bloody get it.

This. Let's them do their thing. If they are so stupid to try to "ban" bitcoin and prosecute its users, they will just be making a fool of themselves, like the MAFIAA did when tried to stop "illegal" (LOL) downloads.

Those stupid guys in suits need to hit with their heads 100 times on a wall before they realize the wall is not going to break. Let's them try to ban bitcoin, we're comfortably waiting laughing at them.

1. Regulators released guidance indicating that bitcoin buying/selling within the bitcoin economy is affirmatively OK, and would not require every user registering with the government, as many conspiracy theorists had direly predicted.
2. Many bitcoin users are in the US.
3. Many bitcoin investors are in the US.

The sum of that != bitcoin hostile.  Just the opposite.

It's also silly to loudly complain when people are standing up and volunteering to take slings and arrows on behalf of others.

For all the knucklehead who like to post uninformed opinions can I suggest you do (a lot) of research before you post.

http://www.moneytransmitterlaw.com/state-laws/

It doesn't matter what you or I think.  It matters what our laws and regulations state.  Until someone steps up to challenge them and set a new a precedent we are required (a law-abiding citizens) to comply.

 

I would expand that to state - It matters what the regulators think our laws and regulations state. And they can change their minds about that.

+1

Because


USA


#1



 :D

USA is #1 at oppressing its own people.

Look up CA on that link, it virtually tells you nothing about how to tell if your are classified as a money transmitter, it just tells you they want $5,000 and a whole bunch of compliance time consuming costly red tape.

Bitcoin doesn't transmit money, just bits. They only turn into money at the other end when we choose to value them as money. For a long time they were worthless. Like PPcoin, Namecoin, BBQcoins ... all of which are transmitted in an exactly identical manner. Are those 'money transmitters' also? Or are you just picking out bitcoin for special attention?

They can rule anything they like. The stupider the rulings the more they lose legitmacy. In fact, I welcome some very stupid bitcoin rulings and I'm positive that the USA 'legal' system will oblige.

marcus_of_augustus  if your bits have no value then please send them all to me.

13a9UjLbc5Su7VigVA9CFfubXqit1A2Ut5


Ah ha.

"No" you say.

Why?  

Because your bits have an equivalent value in real currency or acts as a substitute for real currency which is why the US Government treats digital currencies as "real" currency according to the recent FinCEN guidence.

http://fincen.gov/statutes_regs/guidance/html/FIN-2013-G001.html

So blather all you want.  It is easy for you to anonymously post unsound arguments on an internet forum.  I

f you believe what you say then by all mean pleases send me all your worthless bits.

You omitted the key word ... "transmission" ... prove to me any valuable bits have been transmitted.

If they were someone would have grabbed them for themselves seeing how they were routed through many third party electronic devices, routers. The bits are demonstrably without value. You probably do not even understand how that number you posted (your bitcoin public address hash) is able to receive value do you? For example, precisely define, in legal terms, how I am meant to transmit valuable bits to that number you posted? Edify us.

Edit: keep the personal attacks and slurs for another forum please.

Back in the old days when a Morse code operator in a post office or bank did a long distance transmission of funds, the money didn't go down the wire, it was a simple confirmation of journal entry at each end.

Not, uh, not exactly. It was a confirmation of a journal entry, with the assumption that the money would be stuck on a truck and delivered eventually, or that the other post office or bank would be borrowing money too, thus negating the outstanding bank journal entry (like Ripple is supposed to work). There is no expectation that you will be sent the blockchain once you pay someone in bitcoins, but there is expectation that the receiving person will "borrow" against it, too. So, it's just different enough to be convoluted as hell  ;D

+1
Yes.  The complaining seems misplaced.
The Foundation is the target here, they can handle this.
Keep doing what you do best.

They can? Let's see how well it goes when they start referring to the state officials as 'haters'.

At least it was a soft ball. I think that demonstrating that the foundation is a money transmitter will be hard for CA. It could even be a good fight to get into.

In Politics, often times the right hand doesn't know (or care) what the left hand is doing.

In all honesty, I think what happened is that PayPal, a California based company, filed a complaint naming the bitcoin foundation and using local sellers as evidence. The state didn't even bother to see if there was a connection and sent the scary looking letter. No actual discovery was performed.

That's my suspicion.

I tend to agree.  They could start with a reply that they have ceased and desisted from all money transfer businesses.  (Maybe they were planning some in the future?)
That would put the ball in the other side of the court, and at least let the State define what they are concerned about.

That reply admits guilt in the first line.

No, it doesn't.  Compliance on first notice is not evidence of non-compliance. 
And if it is alleged, the burden shifts, and we should doubt they have probable cause for more than the C&D, so no indictment, or summary dismissal.
Unless there is a witness to the contrary.

But their lawyers have the whole range from which to formulate the whole reply.

"We have never done money transfer business."
"We have no plans on doing any money transfer business"
"If we did plan to do money transfer business, we would fully intend to comply with the relevant structures."
"If we did any money transfer business, it is beneath the scope of the regulation."
"If we did any money transfer business it was not intentional."
"All money transfer business, if there were any, have ceased."
"We are engaging in an audit from xxx auditor to assess whether we are engaging in any MTB, and we expect this report on yyy."
"Go jump in a lake to cool your jets."

The catch is you have to not lie, because then you have fraud, tax evasion, and jail.  So only council under a-c privilege really has the details on what to do.  Out here in the peanut gallery, we can only speculate...

I doubt it, it would be in Paypal's interest to offer Bitcoin as one of their currencies. and I am sure they are aware of that, they just don't know how to deal with it logistically and politically. They would have pressure from central banks.

That's completely stupid - Why would you say you've stopped doing something you were never doing in the first place?? Are you on crack, NewLiberty? The burden of proof is on the state, dum-dum. What you're suggesting would actually cause them more trouble.

I've gotten threatening letters from the government that didn't pertain to me in the past. I just filed them away and ignored them.

Im truly sorry for all Americans and all the spying and regulating they have to endure.

As long as we can still go to Starbucks and get a Grande Latte with the little college Mary Moon were tutoring and screwing after class - it's all good.

You can get a Starbucks in almost every country and Mary has probably been to most of them.

Not my Mary!

PayPal wants bitcoin dead because there is no way they can control it (e.g. force payment reversals) and if bitcoin goes mainstream, it will kill PayPal's business model.

What PayPal wants is a centralized cyber-currency. Don't be surprised to see them investing in Ripple or something like Ripple.

That would be a plus for Paypal, do you think they actually like reversals? You can actually get your merchant account with Visa or Mastercard cancelled if you put through more than a certain percentage of reversals each month.

No it would not be a plus for PayPal because they use transaction reversal to badger customers into doing things their way, as has happened to me on several occassions before I just stopped using them.

Control the money flow and you control the power.

Bitcoin and other open P2P currencies gives that power to the people, the opposite of what PayPal wants.

fight the power with BTC

The date on the cease and desist order is 30 May 2013.

TBF was required to answer within 20 days. Deadline for response lapsed 10 days ago.

Do we know the answer TBF sent? I like to read it.

The Foundation asked for and evidently received an extension to answer. There is currently a debate as to whether or not the foundation should answer the C&D publicly. This would satisfy the community but it could also piss off the regulators.  The rumor is that California officials were not happy that it was made public in the first place. 

Maybe it is time for the foundation to remove advocacy and lobbying from its mission and focus on supporting the maintenance of the protocol and running the annual US conference.

They are clearly a target and that can't be good for them or the bitcoin community.

We have this strong and important tradition of openness.  Murder trials are open.  Is there any precedent that the regulators can work in secrecy?

It is hard for me to imagine that a foundation would receive a cease and desist order and not inform their members and constituents of that order and their reply to it ... unless it is a monarchy.




Your highness, the peasants are revolting.

I know.

I had forgotten that one.  Thanks for my belly laugh for the day!

I agree. Foundation Members were disappointed to read about it in Jon Matonis's column along with the public before being informed of it by the Foundation Leadership.  

Which begs the question, Does the Foundation serve its members or Jon Matonis's journalism.  It seems to me that Jon used his access for his personal benefit.  

Had Matonis prepared his post and then the foundation released info to the membership first, followed by a brief embargo before allowing Matonis to post I would be less suspect.

Hopefully these are growing pains for the Foundation that will be worked out as they learn and understand how to navigate these uncharted waters.

Then again, I would think that the Foundation leadership would understand or have in place others who understand how this should work.

The foundation's mission:

Standardizing Bitcoin
As a non-political online money, Bitcoin is backed exclusively by code. This means that—ultimately—it is only as good as its software design. By funding the Bitcoin infrastructure, including a core development team, we can make Bitcoin more respected, trusted and useful to people worldwide.

Protecting Bitcoin
Cryptography is the key to Bitcoin’s success. It’s the reason that no one can double spend, counterfeit or steal Bitcoins. If Bitcoin is to be a viable money for both current users and future adopters, we need to maintain, improve and legally protect the integrity of the protocol.

Promoting Bitcoin
In the context of public misunderstandings, misinterpretations and misrepresentations, Bitcoin needs to be clearer about its purpose and technology. Allowing the community to speak through a single source will enable Bitcoin to improve its reputation.


Maybe it is time for them to drop the third effort and focus on the first two.  They've not seem to done very well at all on that third issue so far.

I thought you were married with kids?

And your point is? lol

I've been working on the assumption that the Foundation is going to respond.  That is more or less the Foundation's reason for being.  So although ignoring it would also be a sort of message, it doesn't take a foundation to do that.  You and me can do that on our own as you wisely observed.

Its something you learn in law school in America, how to be stupid in very specific ways.
If one doesn't choose to rely on the pervasive government ennui or patriotism and are going to respond, the easiest disinfectant is bright light. Show them what you do and what you don't do.  The Sacramentoans don't know the answer either, so if you don't want better funded competition to spend their effort on motivating the regulators to find something wrong, you can show the regulators something right.
Invite audits, make them experts on Bitcoin, and teach them how it is good for people like them and us.

But just a little knowledge can be a dangerous thing.  Even that has risks.

NewLiberty, excellent points.  But remember our "real" opponents are outside the bitcoin community.  We in the bitcoin community will always have varying opinions,  however  the energy we expend fighting these internal battles detracts from the "real" opponents which in the US is the currently the recent guidance that threatens the livelihood of everybitcoin business who wants to do business with US customers. 

TBF could have simply answered with a list of questions aimed for making sure the burden of proof is on California bureaucrats for the accusation they maybe making, e.g.:

- what evidence (if any) you rely on to prove California laws apply to TBF?

- what evidence (if any) you rely on to prove that what you call ''Bitcoin'' is money?

- what evidence (if any) you rely on to prove ....

If you ask bureaucrats for facts and evidence they normally freak out and shut up. Cause they have no facts relating to the theorem they want to prove, not to mention evidences.

What purpose would releasing it to Bitcoin Foundation members in advance of the public provide?  (other than a trading advantage ..., letting members digest the information and possibly make a decision to trade on it).

The opponents to bitcoin most real to me are those that fear it.  Yes, outside the community.
Understanding their fears, and helping to resolve any which are resolvable, by illuminating the darkness. 
I've no interest in fighting any internal or external battles at all.  Just improving understanding. 

Your regulator is a person too.  Many are more sympathetic to the notion of economic resilience than you might imagine, but they are going to fear that which they don't understand.  One thing the C&D makes clear, this lack of understanding.

I hate how you're always so logical and rational. Can't you just screw up a response once. lol

I am always enjoying his responses as well  ;D

I vividly concur, dear fellow.

Foundation's response to the State of CA:


 - http://www.scribd.com/doc/151346841/Bitcoin-Foundation-Response-to-California-DFI

I see someone is familiar with Marc Stevens and the No-State-Project.



Pretty rational response.

Where do i donate? Bitcoin Foundation seems to have some great lawers behind them.

Love that responce letter,  it shall be interesting to see the follow up on this.

Yeap, well thought of letter which explains everything in detail

I would like to see what MSantori opines about this response and its stance on bitcoin???? MS??

It has been (and continues to be) my prediction that the states will try to follow FinCEN's lead in regulating digital currency as broadly as possible if they are able to do so.  The question is: will they actually be able to do so?  Recall that FinCEN administers the BSA, a federal statute whose terms are quite broad.  Without getting into too much statutory analysis, the BSA defines money transmission very, very broadly.  State regulatory agencies, on the other hand, do not administer the BSA; they administer their own state's laws, each of which are different from the other.  Most of them - including California's - are not as broad as the BSA.  As such, will likely not be able to defend as broad a regulatory stance.

It has also been my argument (take a look at my thread on the legal forum) that California's DFI did not send this letter because they actually believed the foundation was engaged in money transmission.  That position would be absurd, and the regulators are not stupid people.  To the contrary, the C&D was a shot across the bough intended to engage the Foundation in a political dialogue.  If you noticed, the C&D contained no legal analysis and did not specifically cite any instance of supposed money transmission.  Instead, it forced the Foundation to do DFI's analysis for it.  It forced the Foundation to take a position on the issue.  Now the Foundation has done so, and we will have to wait and see DFI's response. The letter was competently-executed statutory analysis. But let's not all start patting ourselves on the back for our accomplishments just yet.

I will note, however, that it was nice to see the Foundation on the offensive.  The letter didn't have to specifically argue that bitcoin sales are unregulated in California, but it did so for the benefit of its members.  That puts a smile on my face

Yes, it gave the "power of the pen" to the foundation.
So the first writing with analysis is made, and a return opinion requested.

Of course  :)

The real meat in this letter is under Section C for "stored value." The Bitcoin Foundation says that Bitcoin is not stored value. This directly contradicts U.S. Department of Treasury FinCEN statements which say that the reason why Bitcoin operators need money transmitter licenses (or MSB licenses) is because BTC is stored value.

The interesting thing is that the Foundation didn't need to argue that Bitcoin is not stored value. They could've just said that, even if Bitcoin is stored value, they don't sell or issue it and so they aren't subject to the license. They claim they are a not-for-profit and their activities are more political in nature. Consumers can only donate Bitcoin to the Foundation, not buy or sell Bitcoin to them.

So why are they arguing something seemingly unnecessary to their case? My thoughts are: 1) They actually have done some issuing, selling or transferring of Bitcoin, although probably in a small capacity. The Foundation actually might be giving money to people. They have grant competitions, and whoever wins the grant probably gets resources to bring the grant idea to fruition. What if, for one of those grants, they gave some BTC to someone? Well, then, that might consist of the activity of issuing BTC, which CA claims they need a license for.

2) The other possibility is that they are making a political/legal move in trying to get a case in court. Just because FinCEN or a CA Department says something, doesn't mean its statement is legally binding. If they could get a judge to adjudicate whether Bitcoin is stored value, then this would bring great clarity to the field. The Foundation argues that Bitcoin is not stored value, or any other definition under money transfer laws, and therefore no Bitcoin operator needs a money transmitter license. This is a bold argument that directly contradicts FinCEN. It's also highly appropriate for the Foundation to make this move since it's their mission to advocate Bitcoin in general.

The Foundation might be on to something. In fact, at the recent conference in DC, the European Central Bank declared that they don't think Bitcoin fits any of the three functions of money: Medium of Exchange, Unit of Account, or Store of Value (http://www.thebitcoinchannel.com/archives/13169). If they mean Store of Value in the same way that the US Department of Treasury means Stored Value, then it's possible that one day the U.S. will give into the notion that Bitcoin is not stored value and thus Bitcoin operators would not need a money transmitter license.

The Bitcoin Foundation's response to CA's cease and desist here is really exciting. The Foundation is officially requesting here for CA to make an official statement that "the sale of bitcoin is not regulated under the California Money Transmitter Act." Of course it might take a couple of years for this case to get through the court system in order to produce a final answer.

In addition, the Foundation says, "It is important, and a core aspect of the Foundation's mission, to ensure that State regulators understand the bitcoin industry, and that the bitcoin industry participants receive clarity regarding and achieve understanding of their obligations under state law." The Foundation here is suggesting that perhaps our government bodies don't quite understand the nuances of Bitcoin, and so consulting with the Foundation should help.

[please note this is not legal advice]

This is spot on.  The next question is whether the Foundation is best suited to handle the setting of the precedent on all these points.  If you care about the outcome, it is time to help in whatever way you can.
If precedent is poorly made, then it may be State + judicial deference v You, in the State's courtroom, in years to come, amicus.

I doubt there was as much thought behind it as you assume.  All they did was send out form letters to a bunch of people.  They probably figured this would be an easy way to get a bunch of businesses to sign up and pay the registration fee.  Instead, they're now going to be forced to justify their actions, or concede that it's not under their jurisdiction.

They can also do nothing.  There is no force acting on CA from the Foundation, just a request.

When did FinCEN state that bitcoin is stored value?  Since 2011, FinCEN regulations have referred to "prepaid access" rather than "stored value", and they have never claimed that bitcoin is prepaid access either.

In a letter to Tangible Cryptography LLC, the State of Virginia did claim that bitcoin was stored value.  However, the definition of stored value in the Virginia law is somewhat different than the California law and the former federal regulations.

Although the BF response is very good the glaring inconsistency is arguing that Bitcoin is not a store of value, but also should be treated the same way as the Mexican peso for sales. Despite its poor track record the peso is very much a store of value while it remains a viable national currency.

Yeah, I don't know but I wouldn't be storing value in pesos any time soon ....

What are the odds that DFI will file a response? Can they just drop it without any response?

FinCEN's March 18 guidance specifically said virtual currencies are not prepaid access.

I believe FinCEN is right on this and any regulators saying otherwise are blowing smoke, or simply don't know what they're talking about.  BTC has no guaranteed cash value.  It is a thing that has value because people will pay for it or accept it as payment, but unlike a prepaid card, sort of the definitive example, no corporation or government backs up the value.

Not to say that it's beyond regulation, but stored value is a particularly poor fit.

Not sure where you got that idea.  Stored value issuers are MSBs but stored value issuers are NOT money transmitter under federal law (SV issuer aka "prepaid access" is one type of MSB entity and MT is another).

FinCEN specifically said Bitcoin exchangers are MT because they accept Bitcoins which are "other value that substitutes for currency"
FinCEN also specifically said Bitcoin exchangers are NOT issuers of prepaid access (stored value) because those require "real currencies".


http://fincen.gov/statutes_regs/guidance/html/FIN-2013-G001.html

Store of value and facilitation of trade are two important functions of money, but they are inseparable. The marketabitlity of money is directly the reason the money has value, and there is no other reason. (Talking of money with no intrinsic value here). It is nonsensical to say that one kind of money is good as a store of value, while another kind is good for trade.

This is why there is no hope for freicoin.

For regulation "Stored value" (technically now called "prepaid access") is a legal term with a specific definition. Nobody (not even FinCEN) is saying Bitcoin isn't a store of value, it simply doesn't meet the statutory requirements for a form of "prepaid access".  Namely there is no ability for redemption and no issuer.

Take a starbucks gift card.  This is regulated as prepaid access because it is only good if it can be redeemed at a future date.  Stabucks issues a card.  You buy a card and starbucks holds that money in escrow until you redeem it.  At some point in the future that "prepaid access" is used to make a purchase.  It is only good if starbucks doesn't steal/lose/embezzle the money in the meantime otherwise it is just an empty promise.

Anytime (well usually) a term exists in regulations it is defined.  Don't assume you know what they mean, or use "common sense" to determine the meaning.  Just look up the term in the regulations.

I believe the important functional difference that is relevant to a legal analysis is that if you have a prepaid card denominated in dollars, you do not have actual dollars.  You have the value of dollars that you can reclaim at some later date.  If you have BTC in a wallet on your system, you have the ACTUAL BITCOINS.  Nobody is guaranteeing to let you pay in the future for some unidentified product.  No third party is required to have a quantity of currency on hand to guarantee that. 

The purpose of regulating "stored value" in the legal sense is to prevent some dishonest or incompetent outlet from selling a bunch of prepaid cards for their services, then going belly-up and leaving people holding a bunch of worthless prepaid cards.  This is why companies usually do not manage the prepaid cards themselves, but some large entity that specializes in meeting all the regulatory requirements does it on contract.

I think if someone actually does start selling prepaid cards that just happen to be denominated in BTC, those cards will be subject to "stored value" regulations.  (I doubt the Casascius "physical Bitcoins" would qualify for this because, again, you are getting the actual Bitcoins themselves, albeit on a different physical medium.)

The tricky part with the coins is that the virtual currency value could be removed from the coin by spending it even without the coin.  The coin holds a copy, another copy could be held by the maker.  Whichever is spent first takes the value.  So, where are the "actual Bitcoins"?

There are no "Bitcoins" ... there are private keys and there is a public database. That's the reality that the law has to catch up with ... no one is holding their breath i don't think.

So stored value is newspeak, means prepaid access. Get it.

FinCEN, via Bradley Stevens in 2011, told Bitcoin USA (now dissolved) that BTC is stored value [https://bitcointalk.org/index.php?topic=41155.0;all (https://bitcointalk.org/index.php?topic=41155.0;all)]. But even if the director of FinCEN had made an official statement about it, such statements are not legally binding, so they're only good for guidance. In addition, the Bitcoin community at large generally speculates that the government thinks Bitcoin is more likely to be covered as stored value rather than the other two money transmission subcategories (payment instruments and money received for transmission). It's a bold statement for the Foundation to say that Bitcoin is not stored value when the community has been guessing that our various governmental bodies thinks it is stored value (despite any nuanced differences in their definitions of stored value).

The Bitcoin Foundation does a good job here at addressing all three subcategories under which a Bitcoin operator can be pinned for money transmission. Even though it is striking that they claim Bitcoin is not stored value, it's also important that the Foundation says that Bitcoin is not covered under payment instruments or money received for transmission. Since, they claim, Bitcoin doesn't fall under any of these subcategories, then Bitcoin operators are not subject to money transmission regulation.

It seems the Bitcoin world would explode with huge success if the US & its states eventually decided that Bitcoin operators are not subject to money transmission regulation. Although, if this happens, it is practical to assume that the government would find some other way to regulate Bitcoin since the government holds a significant interest in preventing criminal financial transactions.

[please note this is not legal advice]

... and liberty.

Did you read any of the posts above.  It isn't a bold statement. FinCEN says in black and white that virtual currencies (to include Bitcoin) are NOT stored value. Period. End stop.  There is absolutely no ambiguity about it.


Cited once again since it seems to be difficult for you to find it.  Not FinCEN not longer uses the term "stored value" they use the more inclusive term "prepaid access".


http://fincen.gov/statutes_regs/guidance/html/FIN-2013-G001.html

Bitcoin is a store of value and a means for exchange, two of the functions of money which are not separable.

[Not to be confused with legal definitions within a body of law that have similar sounding names.]

Yeah, right, I hate it when people change the meaning of words either by ignorance or with a purpose to deceive.

So you'd rather FinCEN use your definition and regulate Bitcoin exactly like they would a prepaid card?

No, thanks.

I just love how they stuck it back to the state.
Hopefully that doesnt invite new trouble though.

Isn't that part of the foundations goal? Make some trouble and/or get into trouble so the rest of the community doesn't have to?

AFAICT you are correct, that is their purpose.

Not solely. As their website says, the "vision" is to

• standardize Bitcoin
• protect Bitcoin
• promote Bitcoin